Legislature(2003 - 2004)
04/16/2003 05:15 PM House EDT
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT,
INTERNATIONAL TRADE AND TOURISM
April 16, 2003
5:15 p.m.
MEMBERS PRESENT
Representative Cheryll Heinze, Chair
Representative Pete Kott
Representative Nancy Dahlstrom
Representative Sharon Cissna
Representative Harry Crawford
MEMBERS ABSENT
Representative Lesil McGuire, Vice Chair
Representative Vic Kohring
COMMITTEE CALENDAR
HOUSE BILL NO. 225
"An Act relating to certain civil actions brought by the
attorney general under monopoly and restraint of trade statutes;
relating to the award of damages in actions brought under those
statutes; and providing for an effective date."
- MOVED HB 225 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 225
SHORT TITLE:MONOPOLY AND RESTRAINT OF TRADE ACTIONS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/28/03 0675 (H) READ THE FIRST TIME -
REFERRALS
03/28/03 0675 (H) EDT, JUD
03/28/03 0675 (H) FN1: INDETERMINATE(LAW)
03/28/03 0675 (H) GOVERNOR'S TRANSMITTAL LETTER
04/16/03 (H) EDT AT 5:00 PM CAPITOL 124
WITNESS REGISTER
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General
Fair Business Practices Section
Civil Division (Anchorage)
Department of Law
Anchorage, Alaska
POSITION STATEMENT: Presented HB 225 and answered questions.
ACTION NARRATIVE
TAPE 03-10, SIDE A
Number 0001
CHAIR CHERYLL HEINZE called the House Special Committee on
Economic Development, International Trade and Tourism meeting to
order at 5:15 p.m. Representatives Heinze, Kott, Dahlstrom, and
Cissna were present at the call to order. Representative
Crawford arrived as the meeting was in progress.
HB 225-MONOPOLY AND RESTRAINT OF TRADE ACTIONS
CHAIR HEINZE announced that the committee would hear HOUSE BILL
NO. 225, "An Act relating to certain civil actions brought by
the attorney general under monopoly and restraint of trade
statutes; relating to the award of damages in actions brought
under those statutes; and providing for an effective date."
[HB 225 was sponsored by the House Rules Standing Committee at
the request of the governor.]
Number 0086
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General, Fair
Business Practices Section, Civil Division (Anchorage),
Department of Law, presented HB 225 to the committee, informing
members that his duties include enforcement of Alaska's
antitrust and consumer protection statutes. Mr. Sniffen noted
that HB 225 is a bill [the department] calls "the Illinois Brick
repealer bill." He explained that currently there is a [1977
U.S. Supreme Court] case, Illinois Brick Co. v. Illinois, which
stands for the proposition that indirect purchasers of goods
cannot sue "upstream antitrust violators" for antitrust
violations.
MR. SNIFFEN illustrated with a chart, noting that if a
conspiracy between two suppliers results in keeping product
prices high, there is a violation of antitrust law. In his
example, the direct purchaser of the goods, the importer, then
passes the high price on to the distributor, the wholesaler, the
retailer, and, ultimately, the consumer. Under current federal
and state antitrust law, the only person with authority to bring
an action against the antitrust violators would be the importer
who'd purchased directly from the wrongdoers.
MR. SNIFFEN said the consumer, however, who ultimately bears the
burden of paying a higher price for the product, wouldn't have
that right. Therefore, HB 225 gives the attorney general the
right to represent consumers who are indirect purchasers in
actions against antitrust violators who may have committed harm
"upstream."
Number 0250
MR. SNIFFEN indicated this legislation is something [the
department] has been trying to get passed for a number of years.
The state's antitrust law was passed in 1975, whereas the
Illinois Brick case was decided in 1977. Since that time,
Alaska just hasn't updated its antitrust law to give the
attorney general the authority to bring these kinds of actions.
He further explained:
In recent multistate cases that we've been involved
in, the State of Alaska has lost out on significant
recoveries because we do not have the authority to
bring actions on behalf of consumers in these kinds of
cases. One involved a couple of vitamin manufacturers
[that] a bunch of states sued for conspiring to keep
prices of vitamins high. And the settlement in that
case gave a million dollars to every state that had a
law like this.
Because Alaska did not have this law, we initially got
zero. And we argued with the settlement committee
that our laws actually should allow us to recover some
money; we ended up with a hundred thousand dollars,
but it was far short of the million dollars we would
have gotten had we had this kind of law in place.
MR. SNIFFEN indicated there is no opposition to this legislation
that the department is aware of, and concluded by saying it
makes good sense for Alaska.
Number 0361
MR. SNIFFEN, in response to an observation from Representative
Crawford, said this bill had been before [a previous
legislature] and was heard by a number of committees without
opposition, but hadn't had a floor hearing.
Number 0438
REPRESENTATIVE CISSNA asked what is meant by the following
language found in subsection (h) on page 3:
A distribution procedure authorized by the court under
this subsection must afford each governmental entity
or person participating in the civil action a
reasonable opportunity to secure that entity's or
person's appropriate portion of the net monetary
relief.
MR. SNIFFEN said it essentially means that whatever distribution
plan [the state] comes up with as a result of an action against
an antitrust violator must be approved by the court. A plan has
to return money, first of all, to the consumers who are harmed
and, if there is money left over, to other agencies or entities
harmed by the conduct. Remaining funds might go to the state,
or [the state] could establish other distribution mechanisms.
He explained:
For example, if the conduct involved music CDs
[compact disks], which is actually a case we're
involved in now, we could ... give money to libraries
and schools to purchase CDs. But those plans would be
drawn together and submitted to the court, and the
court would have to approve them in accordance with
the instruction of the statute that everyone gets
their fair share of the proceeds.
MR. SNIFFEN pointed out that in some cases there might not be
100-percent recovery. "We may only recover a portion of the
actual damages that we can allege, or we may agree to settle the
case for something that's less than 100 percent of everyone's
damage," he told members, noting that such a case would require
devising a system to equitably - perhaps on a pro rata basis -
distribute the recovery among those who were harmed.
Number 0588
REPRESENTATIVE CISSNA requested confirmation that after money
was distributed to consumers who were harmed, leftover money
could be put into state services that "would make restitution,"
in a manner of speaking.
MR. SNIFFEN affirmed that. He said the state now does cy-pres
distribution plans [from a French term that means "as near as
(possible)"]. He indicated the department would have that
option, and added, "It's broad enough that we could fashion the
remedies with the recoveries we get in a number of ways. But
that certainly could be one of them."
Number 0687
REPRESENTATIVE CISSNA moved to report HB 225 out of committee
with individual recommendations [and accompanying fiscal
note(s)]. There being no objection, HB 225 was reported from
the House Special Committee on Economic Development,
International Trade and Tourism.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Economic Development, International Trade
and Tourism meeting was adjourned at 5:23 p.m.
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